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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

|ý                                | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934    
|-------------------------------- | ---------------------------------------------------------------------------------------
|For Quarter Ended April 30, 2002
|o                                | TRANSITION REPORT PURSUANT TO SECION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From  to

Commission File Number 0-22011

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Bionutrics, Inc.(Exact name of registrant as specified in its charter)

|Nevada(State or other jurisdiction organization)                                          |  | 86-0760991I.R.S. Employer incorporation
Identification Number
|----------------------------------------------------------------------------------------- |  | -------------------------------------------------------------
|2425 E. Camelback Rd., Suite 650 Phoenix, Arizona(Address of principal executive offices) |  | 85016(Zip code)                                              

602-508-0112(Registrant's telephone number, including area code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes ý    No o

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, at the latest practical date.

|CLASS                            |  | OUTSTANDING AS OF JUNE 10, 2002
|-------------------------------- |  | -------------------------------
|Common Par value $.001 per share |  | 4,352,600                      

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BIONUTRICS, INC.  INDEX TO QUARTERLY REPORT  ON FORM 10-Q

|                              |  |           |  |                                                                                       |  | Page
|----------------------------- |  | --------- |  | ------------------------------------------------------------------------------------- |  | ----
|Part I. Financial Information |  |          
|                              |  | ITEM I.   |  | Condensed Consolidated Financial Statements (Unaudited):                              |  |     
|                              |  |           |  | Condensed Consolidated Balance Sheets                                                 |  | 3   
|                              |  |           |  | Condensed Consolidated Statements of Operations                                       |  | 4   
|                              |  |           |  | Condensed Consolidated Statements of Cash Flows                                       |  | 5   
|                              |  |           |  | Notes to Condensed Consolidated Financial Statements                                  |  | 6   
|                              |  | ITEM 2.   |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 7   
|Part II. Other Information    |  |          
|                              |  | ITEM 2(c) |  | Changes in Securities                                                                 |  | 11  
|                              |  | ITEM 6    |  | Exhibits and Reports on Form 8-K                                                      |  | 11  
|                              |  | SIGNATURE |  |                                                                                       |  | 12  

2

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BIONUTRICS, INC.  CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                |                                                                                                                                                            | April 30,
2002                       |           | October 31,
2001 |          
|------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | --------- | ---------------- | ---------
|
|ASSETS                                                                          |                                                                                                                                                            |                                      |           |                  |          
|CURRENT ASSETS:                                                                 |                                                                                                                                                            |                                      |           |                  |          
|                                                                                | Cash and cash equivalents                                                                                                                                  |                                      | $         | 15,535           |          
|                                                                                | Trade receivablesnet of allowance for bad debts of $304,677 and $304,677, respectively                                                                    |                                      |           | 4,234            |          
|                                                                                | Inventory                                                                                                                                                  |                                      |           | 35,200           |          
|                                                                                | Prepaids and other current assets                                                                                                                          |                                      |           | 40,002           |          
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|                                                                                |                                                                                                                                                            | Total current assets                 |           |                  | 94,971   
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|PROPERTYnet of accumulated depreciation of $358,047 and $354,886, respectively |                                                                                                                                                            |                                      | 0         |                  |          
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|OTHER ASSETS:                                                                   |                                                                                                                                                            |                                      |           |                  |          
|                                                                                | Patent applications and other related costsnet of accumulated amortization of $218,184 and $204,993, respectively                                         |                                      |           | 351,281          |          
|                                                                                | Investment in InCon Processing, LLC                                                                                                                        |                                      |           | 2,511,769        |          
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|                                                                                |                                                                                                                                                            | Total other assets                   |           |                  | 2,863,050
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|TOTAL                                                                           |                                                                                                                                                            | $                                    | 2,958,021 |                  | $        
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                  |                                                                                                                                                            |                                      |           |                  |          
|CURRENT LIABILITIES:                                                            |                                                                                                                                                            |                                      |           |                  |          
|                                                                                | Accounts payable                                                                                                                                           |                                      |           | 1,449,160        |          
|                                                                                | Accrued salaries and benefits                                                                                                                              |                                      |           | 427,677          |          
|                                                                                | Other accrued liabilities                                                                                                                                  |                                      |           | 623,307          |          
|                                                                                | Notes payable                                                                                                                                              |                                      |           | 984,000          |          
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|                                                                                |                                                                                                                                                            | Total current liabilities            |           |                  | 3,484,144
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|STOCKHOLDERS' (DEFICIT) EQUITY                                                  |                                                                                                                                                            |                                      |           |                  |          
|                                                                                | Common stock$.001 par valueauthorized, 45,000,000 shares; 4,352,600 and 4,352,600 issued and outstanding, respectively                                   |                                      |           | 4,352            |          
|                                                                                | Preferred stock$.001 par valueauthorized 5,000,000 shares; 591,850 and 591,850 issued and outstanding, respectively (liquidation preference of $798,998) |                                      |           | 798,998          |          
|                                                                                | Additional paid-in capital                                                                                                                                 |                                      |           | 37,825,837       |          
|                                                                                | Warrants                                                                                                                                                   |                                      |           | 633,332          |          
|                                                                                | Accumulated deficit                                                                                                                                        |                                      |           | (39,788,642      | )        
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|                                                                                |                                                                                                                                                            | Total stockholders' (deficit) equity |           |                  | (526,123 
|                                                                                |                                                                                                                                                            |                                      |           |                  |          
|TOTAL                                                                           |                                                                                                                                                            | $                                    | 2,958,021 |                  | $        
|                                                                                |                                                                                                                                                            |                                      |           |                  |          

See
Notes to Condensed Consolidated Financial Statements

3

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BIONUTRICS, INC.  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

|                                                     |                                                        | Three Months
Ended April 30  |           | Six Months
Ended April 30 |         
|---------------------------------------------------- | ------------------------------------------------------ | ---------------------------- | --------- | ------------------------- | --------
|
|REVENUES:                                            |                                                        |                              |           |                           |         
|                                                     | Revenue from product sales                             |                              | $         | 10,042                    |         
|                                                     |                                                        |                              |           |                           |         
|                                                     |                                                        | Total gross revenues         |           |                           | 10,042  
|DISCOUNTS AND ALLOWANCES                             |                                                        |                              | 3,212     |                           |         
|                                                     |                                                        |                              |           |                           |         
|                                                     |                                                        | Net revenues                 |           |                           | 6,830   
|                                                     |                                                        |                              |           |                           |         
|COST OF REVENUES                                     |                                                        |                              | 5,138     |                           |         
|                                                     |                                                        |                              |           |                           |         
|                                                     | Gross (loss) profit                                    |                              |           | 1,692                     |         
|                                                     |                                                        |                              |           |                           |         
|OPERATING EXPENSES:                                  |                                                        |                              |           |                           |         
|                                                     | Selling, general and administrative                    |                              |           | 462,862                   |         
|                                                     | Research and development                               |                              |           | 14                        |         
|                                                     |                                                        |                              |           |                           |         
|                                                     |                                                        | Total operating expenses     |           |                           | 462,876 
|                                                     |                                                        |                              |           |                           |         
|                                                     |                                                        | Operating loss               |           |                           | (461,184
|                                                     |                                                        |                              |           |                           |         
|OTHER INCOME (EXPENSE)                               |                                                        |                              |           |                           |         
|                                                     | Equity in the (loss) income of Incon Processing, L.L.C |                              |           | (77,786                   | )       
|                                                     | Interest (expense) income                              |                              |           | (35,653                   | )       
|                                                     |                                                        |                              |           |                           |         
|                                                     |                                                        | Total other income (expense) |           |                           | (113,439
|                                                     |                                                        |                              |           |                           |         
|NET LOSS                                             |                                                        | $                            | (574,623  | )                         | $       
|                                                     |                                                        |                              |           |                           |         
|Basic and diluted net loss per common share          |                                                        | $                            | (0.13     | )                         | $       
|                                                     |                                                        |                              |           |                           |         
|Weighted average number of common shares outstanding |                                                        |                              | 4,352,600 |                           |         
|                                                     |                                                        |                              |           |                           |         

See Notes to Condensed Consolidated Financial Statements

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BIONUTRICS, INC.  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

|                                                          |                                                                                           | Six Months
Ended April 30         |                                          
|--------------------------------------------------------- | ----------------------------------------------------------------------------------------- | --------------------------------- | -----------------------------------------
|
|OPERATING ACTIVITIES:                                     |                                                                                           |                                   |                                          
|                                                          | Net Loss                                                                                  |                                   | ($                                       
|                                                          | Adjustments to reconcile net loss to cash used in operating activities:                   |                                   |                                          
|                                                          |                                                                                           | Depreciation and amortization     |                                          
|                                                          |                                                                                           | Equity in loss of joint venture   |                                          
|                                                          |                                                                                           | Stock-based compensation expense  |                                          
|                                                          | Changes in operating assets and liabilities:                                              |                                   |                                          
|                                                          |                                                                                           | Trade receivables-net             |                                          
|                                                          |                                                                                           | Inventory                         |                                          
|                                                          |                                                                                           | Prepaids and other current assets |                                          
|                                                          |                                                                                           | Accounts payable                  |                                          
|                                                          |                                                                                           | Accrued liabilities               |                                          
|                                                          |                                                                                           |                                   |                                          
|                                                          |                                                                                           |                                   | Net cash used in operating activities    
|                                                          |                                                                                           |                                   |                                          
|FINANCING ACTIVITIES:                                     |                                                                                           |                                   |                                          
|                                                          | Proceeds from issuance of stock and warrants                                              |                                   |                                          
|                                                          | Proceeds from debt                                                                        |                                   |                                          
|                                                          | Repayments of debt and capital leases                                                     |                                   |                                          
|                                                          |                                                                                           |                                   |                                          
|                                                          |                                                                                           |                                   | Net cash provided by financing activities
|                                                          |                                                                                           |                                   |                                          
|NET DECREASE IN CASH AND CASH EQUIVALENTS                 |                                                                                           |                                   | (85,425                                  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD            |                                                                                           |                                   | 100,960                                  
|                                                          |                                                                                           |                                   |                                          
|CASH AND CASH EQUIVALENTS, END OF PERIOD                  |                                                                                           | $                                 | 15,535                                   
|                                                          |                                                                                           |                                   |                                          
|SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING ACTIVITIES: |                                                                                           |                                   |                                          
|                                                          | Expiration of warrants and reclassification to additional paid in capital                 |                                   | $                                        
|                                                          |                                                                                           |                                   |                                          
|                                                          | Settlement of accrued liabilities and debt through issuance of common and preferred stock |                                   |                                          
|                                                          |                                                                                           |                                   |                                          

See
Notes to Condensed Consolidated Financial Statements

5

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BIONUTRICS, INC.  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE AThe accompanying unaudited condensed consolidated financial statements of
Bionutrics, Inc. ("the Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the
instructions to Form 10-Q. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods
presented have been made. The results of operations for the three-month and six-month periods ended April 30, 2002 are not necessarily indicative of the operating results that may
be expected for the entire year ending October 31, 2002. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company's consolidated
financial statements and accompanying notes thereto as of and for the year ended October 31, 2001. The unaudited condensed consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses since inception through
April 30, 2002 of $39,788,642, which have been funded through the issuance of stock and debt. The losses incurred to date, the uncertainty regarding the ability to raise additional capital and
the Company's inability to generate positive cash flows from operations raise substantial doubt about whether the Company will be able to continue as a going concern for a reasonable period of time.

NOTE BBasic and diluted net loss per share is computed by dividing net loss by the weighted average number of common shares
outstanding during the presented periods. Options, warrants, convertible debt and preferred stock are excluded from the diluted net loss per share calculation as they are anti-dilutive.

NOTE CIn July 2001, the Financial Accounting Standards Board issued SFAS No. 141 Business Combinations, and SFAS No. 142Goodwill and Other Intangibles.SFAS No. 141
requires the purchase method of accounting for business combinations initiated after June 30, 2001 for which the date of acquisition is July 1, 2001 or later, eliminates the
pooling-of-interests method, and identifies criteria for
the establishment of identifiable intangible assets separate from goodwill resulting from a business combination. SFAS No. 142 requires companies to cease amortizing goodwill that existed at
June 30, 2001. The amortization of existing goodwill will cease on August 31, 2002. SFAS No. 142 also establishes a new method of testing goodwill for impairment on an annual
basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. The adoption of SFAS No. 142 will result
in the discontinuation of amortization of the Company's goodwill; however, the Company will be required to test its goodwill for impairment under the new standard for its fiscal year beginning
September 1, 2002, which could have an adverse effect on the Company's future results of operations if an impairment occurs. The Company has not completed evaluating the impact of implementing
the provisions of SFAS No. 141 and 142.

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BIONUTRICS, INC.  Management's Discussion and Analysis

The following discussion of the Company's financial condition and results of operations includes certain forward-looking statements. When
used in this report, the words "expects," "intends," "plans" and "anticipates" and similar terms are intended to identify forward looking statements that relate to the Company's future performance.
Such statements involve risks and uncertainties. The Company's actual results may differ materially from the results discussed here. Factors that might cause such a difference include, but are not
limited to, those discussed under "BusinessSpecial Considerations" in the Company's Form 10-K.

Three months ended April 30, 2002 compared with three months ended April 30, 2001.

Results of Operations

Consolidated net revenues for the quarter ended April 30, 2002 were $7,000 versus $22,000 for the same quarter in 2001.

Bionutrics
Health Products continues to sell its remaining evolvE® inventory, which is currently being re-packaged. The Company does not expect
evolvE® will contribute significant revenue to its operations in the future. The Company is repositioning itself as a product development company and as such is engaged in discussions with
several potential marketing partners involving future branded products including dietary supplements and functional food products. New products will be based on new
technology extending beyond a tocotrienol platform. The Company has announced that it has two new cardiovascular products under the brand names, "Vitenol E® 20/20For
Heart & Health" and CARDIO-CINFor Heart and Health". Vitenol E is a rice bran extract and is a more effective antioxidant than standard vitamin E.
CARDIO-CIN is based on Bionutrics's patented niacin and soluble fiber composition. These products are targeted to the cholesterol dietary supplement market. However, they are not currently
being marketed because of the Company's lack of resources.

Cost
of revenues for the three months ended April 30, 2002 was $5,000 versus $41,000 for the same quarter in 2001. Cost of revenues for the second quarter of 2001 was negatively
impacted by the write-off of expired inventory held under consignment.

Operating
expenses for the three months ended April 30, 2002 of $463,000 were $256,000 less than that recognized for the same quarter in 2001 of $719,000. This reduction reflects
the Company's decrease in corporate activity as a result of cash constraints.

Equity
in the loss of InCon Processing, LLC was $78,000 for the three months ended April 30, 2002 compared to $128,000 for the same period in the prior year. The Company records
its share of InCon Processing's loss and income using the equity method.

Interest
expense was $36,000 for the three months ended April 30, 2002 compared to income of $3,000 for the same period in the prior year. This $39,000 difference is due to the
interest expense associated with the issuance of the multiple advance non-revolving note.

InCon
Processing has a fiscal year-end of August 31. The Company's equity in the joint venture's operations for the three months ended February 28, 2002 and
February 28, 2001 are included in the

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Company's statement of operations as if they had the same fiscal quarter. Results of Operations for InCon Processing for the 3 months ended February 28, 2002 and 2001 are as follows:

|                  |  | 3 Months ended
February 28, 2002 |          | 3 Months ended
February 28, 2001 |  
|----------------- |  | -------------------------------- | -------- | -------------------------------- | -
|Revenues          |  | $                                | 676,000  |                                  | $
|Expenses          |  |                                  | 832,000  |                                  |  
|                  |  |                                  |          |                                  |  
|Net loss (income) |  | $                                | (156,000 | )                                | $
|                  |  |                                  |          |                                  |  

Net
loss decreased to $575,000 or $.13 per basic and diluted share for the three months ended April 30, 2002 from $863,000, or $.19 per basic and diluted share for the quarter
ended April 30, 2001 due primarily to lower operating expenses.

Six months ended April 30, 2002 compared with six months ended April 30, 2001.

Results of Operations

Trends and comments as noted for the second quarter apply also to the six month year-to-date comparisons.

Consolidated
net revenues for the six months ended April 30, 2002 were $16,000 versus $31,000 for the same period in 2001.

Bionutrics
Health Products Inc. continues to sell its remaining evolvE® inventory. The Company is repositioning itself as a product development company and as such is
engaged in discussions with potential marketing partners involving future branded products including dietary supplements and functional food products.

Cost
of revenues for the six months ended April 30, 2002 was $10,000 versus $48,000 for the same period in 2001 due to decreased sales volume. Additionally, cost of revenues for
the six months of 2001 was negatively impacted by the write-off of expired inventory held under consignment.

Operating
expenses for the six months ended April 30, 2002 of $1,235,000 were $91,000 less than that recognized for the same period in 2001 of $1,326,000. This reduction reflects
the Company's decrease in activity as a result of cash constraints.

Equity
in the loss of InCon Processing, LLC was $218,000 for the six months ended April 30, 2002 compared to $123,000 for the same period in the prior year. The Company records
its share of InCon Processing's loss and income using the equity method.

Interest
expense for the six months ended April 30, 2002 was $141,000 versus income of $10,000 for the same period in 2001. This $151,000 difference is due to the interest expense
associated with the issuance of the multiple advance non-revolving note.

InCon
Processing has a fiscal year-end of August 31. The Company's equity in the joint venture's operations for the six months ended February 28, 2002 and
February 28, 2001 are included in the Company's statement of operations as if they had the same fiscal period. Results of Operations for InCon Processing for the 6 months ended
February 28, 2002 and February 28, 2001 are as follows:

|         |  | 6 Months ended
Febuary 28, 2002 |           | 6 Months ended
Febuary 28, 2001 |  
|-------- |  | ------------------------------- | --------- | ------------------------------- | -
|Revenues |  | $                               | 1,322,000 |                                 | $
|Expenses |  |                                 | 1,757,000 |                                 |  
|         |  |                                 |           |                                 |  
|Net loss |  | $                               | (435,000  | )                               | $
|         |  |                                 |           |                                 |  

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Net
loss was $1,588,000 or $.36 per basic and diluted share for the six months ended April 30, 2002 compared to $1,456,000 or $.32 per basic and diluted share for the same period
in 2001.

Liquidity and Capital Resources

Net cash used in operating activities during the six-month period ended April 30, 2002 was $486,000 as compared to $1,127,000 during the same
period in 2001. This decrease is due primarily to the Company's cash conservation efforts.

The
Company did not generate any cash from investing activities during the six months ended April 30, 2002 and April 30, 2001.

Net
cash provided by financing activities totaled $401,000 for the six-month period ended April 30, 2002 versus $498,000 from the same period in 2001. The cash
provided during the six months ended April 30, 2002 was from the issuance of debt whereas the cash provided during the same period in the previous year was from the sale of common stock
pursuant to an equity line of credit.

In
October 2001, the Company executed an amended and restated consolidated multiple advance non-revolving note to borrow up to $700,000 from certain directors, a
stockholder and an unrelated party. The amount borrowed on October 31, 2001 was $583,000. The note agreement requires a fixed interest payment of $140,000 if the full $700,000 is borrowed,
which results in an effective interest rate of 36.5 percent. The note payable is secured by the assets of the Company. The note was payable in full on January 2, 2002 and is convertible,
at the option of the lenders, into shares of the Company's common stock at the rate of $1.00 per share. On January 30, 2002, the note was amended to increase the amount that can be borrowed to
$860,000, the fixed interest payment to $172,000 if the full $860,000 is borrowed, and to extend the due date to March 1, 2002. On April 9, 2002, the note was amended to increase the
amount that can be borrowed to $1,154,500, the fixed interest payment to $230,900 if the full $1,154,500 is borrowed, and to extend the due date to June 1, 2002. The parties are currently
discussing a further extension of the due date. As of June 10, 2002, the amount borrowed under the note was $1,004,500.

In
August, 2001, the Company entered into a stock purchase agreement with Pharmaceutical Marketing Brands, Inc. (PMB), as nominee, for the purchase of 49% of the Company and
options to purchase 5,000,000 shares of common stock at $1.00 per share, for $5 million. This agreement was amended on October 5, 2001, to assign PMB's rights, as nominee, to its
principal HealthSTAR Holding LLC and to provide for an increase in the investment from $5 million to a minimum of $6.5 million up to a maximum of $10 million at $1.00 per share of
common stock and for the Company to sell such shares directly to institutional and or accredited investors subject to a voting agreement among the parties. The agreement was further amended on
October 31, 2001 to essentially extend the closing date as well as provide for the issuance of 5,227,000 shares of the Company's common stock at $1.00 per share to
HealthSTAR in exchange for a 5-year, interest-bearing promissory note. The amendment also eliminated the 5,000,000 stock options at $1.00 per share. The Company has subsequently agreed to
enter into certain strategic agreements and purchase certain assets in the field of pharmaceutical marketing services. On December 28, 2001, the agreement was amended to extend the initial
closing date for the purchase of a minimum number of shares to January 31, 2002 and allow for one or more subsequent closings until March 31, 2002. On January 29, 2002, the
agreement was amended to extend the initial closing date until March 1, 2002, with subsequent closings on or before May 1, 2002. The parties are discussing the terms and conditions of an
extension and the close. There can be no assurance that this stock purchase agreement with HealthSTAR will close.

The
Company is negotiating the private sale of 10,000,000 shares of its common stock to an investor at the price of $1.10 per share. Timing of the investment is being discussed to
provide an initial funding of at least $3,500,000 before the end of June, 2002 with subsequent payments for the full amount of the investment to occur by the end of August, 2002. The sale is expected
to contain a

9

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shareholder agreement with certain provisions relating to a shareholder voting agreement and restrictions on future resale of the shares. There can be no assurance that this private placement will
proceed as discussed or that it will close and provide the company with the indicated cash.

In
September 2000, the Company and Justicia Holdings Ltd. entered into a common stock Purchase Agreement for the future issuance and purchase of shares of the Company's
common stock. The Agreement establishes what is sometimes termed as an equity line of credit or an equity draw down facility. The Agreement permits the company, in its discretion, and subject to
certain restrictions, to sell up to an aggregate of 800,000 shares, with the maximum amount for each sale not to exceed $1,000,000 each month, based on a formula of weighted average price and total
trading volume for a given period. The period during which the Company can make such sales is two years beginning upon the effective date of a registration statement for the resale of the shares. The
price is based on the volume weighted average daily price of the Company's common stock for the 22 trading days following a draw down notice. Drawdowns are available every 29 trading days. The current
stock price and trading volume severely limit the amount available to the Company at any one drawdown period. The common stock purchase agreement with Justicia Holdings Ltd limits the Company's
ability to sell its securities for cash at a discount to the market price pursuant to an equity line type financing for 24 months from the effective date of the registration statement filed on
December 28, 2000 or 60 days after the entire 800,000 shares have been purchased. The Company is not permitted to drawdown on the equity line until the registration statement filed on
Justicia's behalf becomes effective. The Company intends to continue to pursue such registration statement during fiscal year 2002. There is no assurance that the registration statement will become
effective.

The
Company requires additional financing of at least $4,000,000 to achieve its minimum corporate goals over the next 12 months. The Company is currently in negotiations to secure
this necessary capital through equity private placements as well as debt financing. The Company does not at this time have any committed sources of financing, other than the Justicia equity line of
credit, the terms of which currently prohibit the Company from drawing down any funds. There can be no assurance that additional financing will be attainable on terms acceptable to the Company, or at
all, at such time as the Company's needs may require. Access to additional capital will depend substantially upon prevailing market conditions, and the Company's financial condition and prospects at
the time. On July 18, 2001,
the Company's common stock was delisted from the Nasdaq SmallCap Market, and the shares are currently quoted on the OTC Bulletin Board. As a result, activity in the Company's common stock has declined
substantially, which could adversely affect the Company's ability to raise necessary capital. Such additional financing may not be attainable, or attainable on terms acceptable to the Company. Access
to additional capital will depend substantially upon prevailing market conditions, and the financial condition of and prospects for the Company at the time.

The
Company has made application for a loan in the amount of $5,000,000 to a lender that specializes in loans secured by intellectual properties. If the Company were successful in
obtaining this loan, it would receive $5,000,000 cash (less closing costs and points estimated to total $350,000) and would be required to place $5,000,000 of debt on its financial statement. The
terms of this agreement are presently being discussed. There is no assurance the Company will succeed in obtaining this loan or that, if successful in obtaining the loan that the terms and conditions
will be as described herein.

The
loan will be secured by a "pod" of six patents owned by the Company's subsidiary, LipoGenics, Inc. If the Company defaults on the loan's interest payments, loan repayment or
other material provisions of the loan agreements, the lender would be entitled to foreclose on the collateral and, in such case, the Company would lose the patents and all associated rights. The loss
of these patents would have a material adverse effect on the Company.

10

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BIONUTRICS, INC.    PART IIOTHER INFORMATION

ITEM 2(c)Changes in Securities



ITEM 6Exhibits and Reports on Form 8-K





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BIONUTRICS, INC.  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

Bionutrics, Inc.
(Registrant)

|By:    |  | /s/RONALD H. LANERonald H. Lane                              |  | 
|------ |  | ------------------------------------------------------------ |  | 
|Title: |  | Chairman of the Board, Chief Executive Officer and President |  | 
|Date:  |  | June 13, 2002                                                |  | 
|By:    |  | /s/KAREN J. HARWELLKaren J. Harwell                          |  | 
|Title: |  | Controller and Chief Accounting Officer                      |  | 
|Date:  |  | June 13, 2002                                                |  | 

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